July 27, 2006

Under the terms of the deal, Kazaa’s owner Sharman Networks will pay the world’s four major music companies — Universal Music, Sony BMG, EMI and Warner Music — more than $100 million and commit to immediately going legal, said the International Federation of the Phonographic Industry.

[...] Ovum analyst Jonathan Arber said the settlement would have a mostly symbolic importance, as Kazaa was past its prime.

“It’s nowhere near as popular as it used to be. Very few people are thought to be using it anymore because better services came out,” he said. “It is a big legal victory, a good symbol for them to put out, but in terms of actually reducing piracy, people migrated to other file-sharing networks a long time ago.”

Analyst Eric Garland of BigChampagne, which tracks file-sharing networks, said the entertainment industry faces a crossroads: It can develop business models that embrace Internet distribution or engage in an even more aggressive anti-piracy campaign against people who download copyrighted works.

“Are we really going to see, at this late date, more and more court actions against kids and soccer moms or are we going to see a shift?” he said. “Are we going to declare victory, based on these big wins, and move on to the carrot?”